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3 Steps to Retail Supply Chain Excellence Using Dynamic Collaboration

Digital transformation is the defining reality for today’s retailers. Reorganizing to serve a smartphone-wielding consumer who shops on-the-go with the expectation of receiving their purchase at the time and place of their choosing – that’s digital transformation.

It starts with the omnichannel shopping experience and wends through every operational function. The most important of these is supply chain management – which enables a customer-centric purchasing experience through retail supply chain excellence.

As we discuss in our whitepaper, Smart Trading Networks Define the Future of Retail Success, retailers have the advantage of digitized B2B integration using EDI and Internet-based messaging to support trading partner communication.

Smart trading networks have evolved from these foundational B2B messaging services. By aggregating transactional data using analytical applications you can monitor, analyze, and report on consumer demand, inventory availability, and supply chain performance.

3 Steps to Achieve Retail Supply Chain Excellence

Start your digital transformation by taking these 3 steps to manage complex trading partner relationships with dynamic collaboration.

  1. Establish a centralized supplier information management system
  2. Understand trading partner performance
  3. Manage trading partnerships to improve customer fulfillment

Step 1: Establish a Centralized Supplier Information Management System

Retailers relying on more sophisticated trading relationships to serve customers need to stay current with their trading partners’ capabilities. At the same time, you have to reduce the cost of managing communications while ensuring compliance to their service levels and operating standards.

A Gartner study pegged typical supplier management costs in a range from $585 to just under $1,000 per vendor. With an average of 3,000 active trading partner relationships, retailers are spending close to $3 million annually to manage their supply chain partnerships.

As you implement more sophisticated supply chain community initiatives like customer drop-ship or vendor managed inventory, the costs to manage trading partner relationships will only increase. And that necessitates implementing a centralized system to support trading partner communication.

Step 2: Understand Trading Partner Performance

Monitor the service level and compliance performance of vendors, distributors, banks, 3PLs, and transportation providers with dynamic collaboration. Combining transactional data and data from other sources like point-of-sale, retailers and their trading partners can gain visibility into potential service level issues as well as performance trends.

Using dynamic collaboration scorecards gives you a clear view of trading partner performance. Dynamic collaboration is supported by monitoring and measuring specific metrics.

  • Transaction metrics – document arrival and acknowledgement timeliness
  • Operational metrics – transaction volume by document or trading partner
  • Business metrics – order, shipment, and invoice accuracy and timeliness

Dynamic supply chain collaboration scorecard example

Improving vendor compliance has demonstrated benefits like reducing distribution center costs by eliminating manual processing. It also improves customer fulfillment by speeding merchandise flow to meet demand.

Step 3: Manage Trading Partnerships to Improve Customer Fulfillment

As retailers look to deliver a more convenient omnichannel shopping experience, coordinating their supply chain to ensure inventory availability will define success.

For example, retailers increasingly look for vendors to directly service their customers quickly and efficiently. As Retail Systems Research (RSR) noted in Retail Insight: Consumer Expectations Transform the Industry in 2016, retailers prioritize working with vendors who can provide special capabilities, like drop-ship fulfillment, and meet their compliance and lead-time standards.

RSR Research - Factors influencing sourcing strategy

A smart trading network gives you a vendor compliance collaboration platform with the necessary insight to manage complex business requirements more efficiently. For example, Stage Stores, a regional U.S. department store chain, has leveraged dynamic collaboration to increase compliance violation identification by 500%. At the same time, they reduced the time to resolve compliance issues with vendors from 3 months to 72 hours – streamlining merchandise flow while greatly improving trading partner relationships.

Get started today

Retailers’ focus on leveraging customer-centric supply chain capabilities and ensuring service level execution across multiple trading partners requires a more automated, collaborative communication and standards compliance process. The three steps outlined above are a great way to start transforming your supply chain to be customer centric.

To learn more about implementing a customer-centric supply chain, download Smart Trading Networks Define the Future of Retail Success.

More blog posts in this series:

  1. 3 Priorities for Adopting a Customer-Centric Retail Supply Chain
  2. 5 Tips for E-commerce–Ready Item Management
  3. 3 Steps to Retail Supply Chain Excellence Using Dynamic Collaboration
  4. Next up for retail supply chain: Inventory orchestration
Show More


OpenText is the leader in Enterprise Information Management (EIM). Our EIM products enable businesses to grow faster, lower operational costs, and reduce information governance and security risks by improving business insight, impact and process speed.

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